A Healthcare Payer’s Guide To Lean Document Processing

Lean methodologies are geared toward continuous process improvement and encourage eliminating waste and reducing defects. These practices originated in the Japanese manufacturing industry, but have since been used to improve countless business processes in companies around the globe. In this Q&A, Mark Smith, Director of Strategic Alliances at OPEX Corporation, shares his advice on how to apply lean concepts to the document processing operations of health insur-ance companies.

Congdon: Is managing paper documents still a significant challenge for health insurance companies?

Smith: Absolutely. While studies show that 75% to 85% of the claims health insurers process today are electronically transmit-ted, the remaining 15% to 25% continue to enter these organizations as paper documents. While they may constitute a significantly smaller percentage of the overall claims received, these paper claims generally represent the “uglier side” of claims processing. For example, they are the handwritten or dot-matrix claims forms submitted by small doctors’ offices or the long multipage forms that include added documentation or correspondence. This 15% to 25% of paper claims can take longer and be more costly to process than the 75% to 85% of electronic claims, largely because of the way these documents continue to be processed by health insurers. In addition to claims, of course, insurers receive multiple other forms and paper documents in the mail related to eligibility, enrollment, credentialing, and more.

Too many payers continue to use dated manual processes to manage these paper documents. These practices are rife with wasted steps that prolong turnaround time and introduce risk into the process.

Congdon: Wait a minute. Don’t most health insurers have document imaging systems in place to handle these paper documents?

Smith: Yes. However, many health insurers perform document imaging activities at the back end of the process. In other words, they scan paper documents primarily for electronic archival purposes and still work off the paper document for the majority of their business workflows. They still shuffle paper back and forth and manually enter data from the paper documents into their databases and systems.

Congdon: What wasted steps are common in the document imaging processes employed by many health insurance providers?

Smith: According to popular lean methodologies, a wasted step is one that adds no value to the final product. When it comes to document processing, the end product is understanding the information contained within a business document and converting that information into data that can be leveraged by other systems.

Traditional document imaging processes require several wasteful steps that essentially add no value to this end product. Most are the result of the prep work necessary simply to scan these documents into an electronic document management system. Many document scanning operations require staff members to open mail, sort documents into different piles or batches, date stamp documents, insert separator sheets, scotch tape smaller documents or envelopes to 8.5-by-11-inch pages, and jog piles of documents to ensure clean feeds into the scanner. All of these steps require a great deal of time and labor, and essentially contribute nothing to the end result.

I’ve witnessed document imaging operations where four, five, six, or as many as ten people are handling the paper for every person actually scanning. In some instances, the individuals responsible for document prep and the actual scanner opera-tors work on different teams entirely. Not only is this structure extremely wasteful — it is error prone. The more involved your document preparation, the more human touch points you introduce into the process, and the more costly, inefficient, and error prone it becomes. With this approach, there’s also a good chance you’ll have piles of documents just sitting around waiting for the next step in the process or waiting to be imaged. With more movement and handoffs, there is also a higher likelihood that documents can become lost, misplaced, or damaged.

Congdon: What’s the alternative? How can a health insurer make its document imaging processes more lean?

Smith: Our advice is to image early in the process and to eliminate as much of the document prep work as possible. This will likely require not only a shift in philosophy, but also a change in document imaging equipment because most document prep work is often necessitated by the document scanners and soft-ware in use.

OPEX Corporation has developed an imaging platform focused on eliminating document prep. Our solutions couple a mail extraction desk, with an open track scanner, and capture soft-ware; allowing a single operator to scan and capture documents right out of the envelope at the point of entry — no sorting, scotch-taping, cleanup, or separator sheets required.

Our approach to document processing has proven effective. For example, the National Health System (NHS) in the UK found our scanning approach to be three times as efficient on patient records as their previous imaging system because of reduced document preparation and fewer paper jams.

Congdon: Why not just outsource the entire scanning process?

Smith: Many health insurers have opted for outsourcing as a viable option for their operation. Doing so, however, requires thoughtful consideration around a number of key issues. First of all, service bureaus contract for all types of document scanning projects. It is important to select a company that specializes in processing health insurance documents. Obviously, there are also a lot of privacy and security requirements attached to health documentation. This sensitive information requires specialized handling by an outsource organization fit for the task. Also, as technology platforms have changed and paper volumes have shifted, insurers might want to reevaluate their internal vs. external costs. Scanning directly in the mailroom can be surprisingly efficient. Our advice is to be careful that at the end of the day, you are not paying someone to scan your documents who is not equipped to do so efficiently, securely, and economically.

Congdon: Any other steps a health insurer can take to ensure lean document processing?

Smith: Yes. We advise health insurers to centralize their document imaging operations into a scanning center of excellence. Distributed scanning has become increasingly popular over the years, and it is certainly the model of choice for several health-care applications, particularly for applications where information has multiple points of entry in a healthcare facility (e.g. in-person patient registration). However, most health insurance documents enter the organization from a single point of entry — the mailroom. These documents are most efficiently captured when a small group of scanning experts are dedicated to the process of ensuring that high quality images are captured the first time and that document images are routed to the right systems locations. A centralized approach will reduce the scanning training necessary, reduce instances of rescans, simplify scanner maintenance and upgrades, and streamline the overall document imaging process.

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